By Lydia DePillis
According to a government report released earlier this week, the nation’s poverty rate increased last year despite rising incomes, illustrating the impact of soaring prices and the end of the last pandemic aid programs.
As per the Census Bureau’s supplemental measure, which accounts for a wider array of benefits and living costs than the standard poverty rate, the percentage of Americans living in poverty went up to 12.9% in 2023, up from 12.4% in 2022. The median household income reached $80,610, finally returning to its level before the pandemic when adjusted for inflation.
Poverty rates have climbed again in recent years following a surge of pandemic-related assistance — alongside a robust labor market that raised wages for many at the lower end of the income scale — combined with the fastest inflation seen in a generation.
Stimulus payments, enhanced unemployment benefits, and extended tax credits for low-income families cut child poverty by half in 2021, reaching the lowest levels recorded since tracking began in 1967. However, the cessation of these supports, along with soaring costs for food and other essentials, erased those advancements in 2022.
“To effectively reduce poverty, you need two types of strategies: one focusing on economic factors and the other involving investments in essential programs and the safety net,” explained Olivia Golden, interim executive director of the Center for Law and Social Policy, a progressive advocacy organization. “The significant impact that policies have on the lives of families and their financial struggles is starkly evident when you look at the past few years.”
The income improvement was especially noticeable among low-wage households, rural families, and men, with the earnings gap between men and women widening for the first time since 2003. Census officials attribute this to increasing workforce participation among Hispanic women, who tend to earn less.
Additional federal funding for nutrition assistance and free school lunches also came to an end in late 2022 and early 2023, leaving countless families with reduced options at grocery stores. This had a significant impact on children; the poverty rate for those under 18 rose by 1.3 percentage points to 13.7%.
Social Security remains the most effective anti-poverty measure, elevating 27.6 million individuals above the poverty line; the poverty rate among those over 65 remained stable at 14.2%.
Disagreements over how to assess poverty have persisted. In recent years, fluctuations in prices, policies, and incomes have underscored how measurement methods influence key statistics.
For instance, the primary reason for the rise in the supplemental rate was a significant increase in poverty thresholds, which reached $37,482 for a family of four residing in an apartment, resulting in more individuals falling below the new threshold. The official poverty rate employs a different inflation measurement method, yielding a decrease in 2023 rather than an increase.
However, these thresholds also adjust based on what median-income households spend on specific items, which rose sharply in 2021 and 2022.
“The thresholds are quite peculiar — they can alter the metrics in unconventional and opaque ways,” stated Bruce Meyer, a senior fellow at the conservative American Enterprise Institute. “So it’s not actually reflecting whether you can afford basic housing; it’s about what the average person spends.” Similarly, a left-oriented think tank, the Center on Budget and Policy Priorities, characterized the supplemental threshold increase as a “temporary anomaly.”
Other metrics indicate growing hardship. Data from credit reporting shows an uptick in individuals falling behind on credit card payments. Another survey conducted by the Agriculture Department revealed that the proportion of families unable to access sufficient food at some point during the year increased in 2022 and 2023. The fluctuations in aid have been particularly evident at food banks, which serve as critical support when families are in need.
In Ohio, a statewide network of food banks observed that while visits dropped in 2021 as people had enough income and food stamps to maintain their food supply, they surged in 2023 — jumping 42% above 2019 levels — after the additional subsidies were discontinued. Other pandemic-related initiatives that provided food bought from farmers and ranchers have also been exhausted.
Julie Chase-Morefield, the president of Second Harvest Food Bank of North Central Ohio, noted that she can only distribute 26 meals worth of food at a time now, down from 46 meals in 2019 due to the rising demand. She believes an aging demographic, climbing rents, and inadequate public transportation have collectively worsened the situation for people, even as much of the economy has resumed its pre-COVID conditions.
“It truly highlights a deeper necessity that is becoming ingrained in the community,” Chase-Morefield remarked, adding that her clients, who previously visited infrequently, now come in regularly. “What’s the reason behind the continuous rise in these numbers month after month?”
The statistics emerge as the final weeks of a presidential campaign unfold, where economic issues are paramount among voters’ concerns. Both political campaigns have indicated support for enhancing the child tax credit.
However, the differences are stark. The Democratic Party platform suggests a series of enhancements to services for low-income individuals. In contrast, the Republican platform does not address poverty. Project 2025, a set of plans created by former officials from the Trump administration and their allies, focuses on tightening criteria for federal assistance programs.
Had Congress approved a permanent expansion of the child tax credit as proposed by Democrats, an estimated 3.6 million additional children would have been elevated above the poverty line, as calculated by the Columbia University Center on Poverty and Social Policy.
